The Irish bailout looks to be failing and the Irish government looks to be falling. At least that’s the way it looks now. It might be completely different in 20 minutes.
But for now at least, Europe and the Eurozone in particular have big problems.
Ireland’s economic problems stem from banks being exposed in the private sector housing and construction markets. The Irish government is trying to fix the problem by cutting public sector spending, which is obviously saving very little money. In fact, it exacerbates the problem by depressing the national economy further and killing any opportunity for growth.
The Portuguese government have now made statements saying they’re not going to be the next to fail which means they almost certainly will be the next to fail.
If the financiers start betting on the failure of the Euro (which they already seem to be), there’s no way Portugal will convince investors in Lisbon to avoid a bailout in Iberia. After Portugal, comes Spain, and then probably Italy.
Dominoes are beginning to tumble and the German-led Eurozone will be left facing huge questions and have very few answers.